Luxury Goods Giant Released "Better Than Expected" Three Quarter Data

Benefit from strong

Demand, France

Group Herm s (

Third quarter sales exceeded expectations.

Earlier, three other luxury goods groups in France, LVMH and Kering (Kai Yun), also announced the "better than expected" data in the first quarter.

Over the past few months, demand rebounded in mainland China, retail sales in Hongkong narrowed, pound sterling depreciated to boost sales in the UK, and the recovery in the US market stimulated LVMH, Kering, Herm s, Richemont (Burberry), Burberry, Hugo Boss, and share prices began to pick up.

As the largest consumer group of luxury goods, Chinese consumers contribute 1/3 of the global luxury consumption. Under the encouragement of government related policies, the consumption of Chinese consumers at home increases.

"Chinese consumers are slowly coming back, which is the main driving force for the recovery of the luxury market," said Makiko Zuercher Luxury, head of Dynapartners Luxury Brands Fund.

These positive trends have overshadowed other negative concerns, including the decrease in the number of European tourists due to the terrorist attacks in Paris, and the weakening of purchasing power of local consumers in Russia, the Middle East and Brazil.

In a report released earlier this week, HSBC analyst Erwan Rambourg and Antoine Belge pointed out: "the negative impact of the devaluation of the renminbi in August 2015 and the terrorist attacks in Paris on the consumption demand of luxury goods has weakened significantly.

Every market (except Japan) is showing a better trend than before, or at least flat. "

Stock brokers say some hedge funds have already sold out luxury stocks. They expect stock prices to fall, but in recent months, more funds are looking at luxury stocks.

According to the report of September this year, since 2016, the share price of the Swiss luxury group Richemont (peak group) and the Italy luxury group Tod 's SpA has fallen more than 20%, and is still the target of short investors.

At present, the Swiss Richemont is the only luxury stock on the market that has a short selling proportion. Half of its sales are from watches, and watches are the worst performing group at present.

Astec Analytics data show that the peak group has the highest "short sales ratio".

At the same time, it is also one of the few stocks that the stock price is still falling this year.

However, after the announcement of the first half of this week's financial report and announcement of the restructuring of management, Friday's closing peak price 66.35 Swiss Franc rose 5.15%.

Kering has easily become the best performing luxury stock this year, and short sellers have very low positions in the stock market.

Fund managers and buyer analysts say investors still need to choose carefully. Italy's Prada and Tod 's groups may continue to suffer setbacks in the near future due to competition from more innovative brands.

In September of this year, Hermes, the Tod group and the s group issued a series of unoptimistic financial reports and performance expectations, which led to a sharp fall in their share price.

Recent stock market shows that luxury group can only achieve sales growth only by expanding market share. The past frequently used new stores and price increases have not helped.

Herm China s's third quarter sales grew 8.8%, up from 7%, compared with analysts' expectations.

Last month, LVMH and Kering announced third quarter earnings respectively, and their flagship brands, Louis Vuitton and Gucci, grew better than expected.

After the announcement of the earnings report, the share price rose sharply.